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Catering group Elior keeps financial targets after first half profits rise
May 30, 2017 / 5:35 AM / 6 months ago

Catering group Elior keeps financial targets after first half profits rise

PARIS (Reuters) - Elior, Europe’s third-largest catering group, reported higher first-half revenue and core profits, helped by growth overseas, and kept its full-year financial targets for an increase in sales and earnings.

Elior, which competes with bigger rivals Sodexo and Compass Group, also said it was confident it could deliver over its longer-term goals.

Elior has a contract arm, which provides catering to businesses, schools and hospitals and accounts for 76 percent of the firm’s overall business. It also has a concessions business, which serves airports, railways and motorways.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 17.9 percent to 255 million euros (221.5 million pounds), giving a margin of 7.9 percent of revenue against 7.4 percent a year-ago.

Revenue rose 10 percent to 3.213 billion euros in the six months ended March 31, helped by acquisitions and robust demand in the United States, with 55 percent of revenues coming from abroad compared with 51 percent the previous year.

Its closely-watched organic revenue - excluding the impact of voluntary contract exits - rose 4.2 percent in the period.

Elior, whose clients range from the Vatican museum to France’s La Poste and Los Angeles airport, reiterated its targets for full-year organic revenue growth of at least 3 percent, an increase in its EBITDA margin of between 20 and 30 basis points, excluding acquisitions, and a significant rise in EBITDA and adjusted net earnings per share.

Commenting on Elior’s longer-term 2020 goals, Chief Financial Officer Olivier Dubois told reporters Elior was on track to reach a revenue target of between 7-8 billion euros.

He said revenues could reach 6.4-6.5 billion euros at the end of the current financial year, while U.S. sales could exceed $1 billion this year, broadly in line with the group’s goal of achieving U.S. sales of $1.5 billion in 2020.

Dubois was also confident of reaching the 2020 targets for an EBITDA margin of 9 percent to 10 percent of revenue.

Elior shares are up around 14 percent so far in 2017, beating an 11 percent rise on France’s SBF-120 equity index.

Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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